Book Excerpt from “The Next CMO – A Guide to Operational Marketing Excellence” by Peter Mahoney, Scott Todaro and Dan Faulkner
CHAPTER 1 The Problem with Operational Marketing Leadership
Warning: There is some tough love in this chapter.
It is widely understood that CMOs suffer some of the highest turnover rates in the C-suite. How can that be, given the fact that marketing executives who reach the top rank in the profession have spent years honing their ability to communicate the value of their products and services?
The fundamental problem is that marketing has become increasingly complex over the last two decades, and at the same time, the expectations for effective execution and accurate measurement of marketing functions have grown significantly. And while most marketers have implemented automation systems for delivering and measuring the tactics of marketing, the more strategic issues (including building, measuring, and optimizing the overall marketing plan) are managed manually. As a result, the processes for managing the overall marketing function often buckle as the complexity grows, causing ineffective strategic execution and the inability to clearly demonstrate the value of the marketing function.
The Harvard Business Review (HBR) covered this topic extensively and proposed some recommendations in a 2017 report called “The Trouble with CMOs.” It offers some solid recommendations to remediate this issue, including aligning expectations and finding the right skills match for the CMO role. But those suggestions don’t address the underlying strategic execution problem.
When you look at the results of the Forrester SiriusDecisions 2019 Global CMO study, it is clear that CMOs themselves know what needs to improve based on their self-identified areas of focus including:
• Marketing Strategy & Investment
• Marketing Planning & Campaign Strategy
• Marketing Value
• Marketing Organization Design & Development
In short, CMOs agree that their main focus should be defining and executing strategy while proving the value of marketing.
Unfortunately, CMOs struggle with both strategic alignment and measuring the true return created from marketing budget allocation. The Fundamental Responsibilities of the CMO The CMOs who participated in the SiriusDecisions study seem to have a view of CMO responsibilities that are aligned with our perspective. When talking to CMOs about approaching a role, or CEOs about hiring a CMO, we tell them that the fundamental elements a CMO must execute are to:
• Set goals
• Define (or refine) your strategy
• Build a plan that is designed to achieve those goals
• Execute the plan
• Optimize the plan when change inevitably happens
• Communicate results
Unfortunately, CMOs are not getting it done. Our assessment comes from over seventy collective years in marketing and business. Peter, for example, spent thirty years as a marketing practitioner, including a thirteen-year stint as an executive (five as the CMO) of a public software company that grew to $2 billion in annual revenue and made over a hundred acquisitions during his tenure. After leaving that company, he created our company to address these issues. Since then, we have reviewed well over a thousand marketing plans from companies of all sizes, industries, and levels of maturity. Based on that large body of evidence, we can confidently posit that the issues are pervasive. We can also point to many instances in our own careers where we have struggled with each one of these core responsibilities. In other words, we are guilty too.
Assessing the Gaps
Let’s explore some of the gaps in a little more detail. We have seen persistent issues in each of the following six areas:
1. Inadequate (or completely absent) goals
Every marketing organization should have a clear set of objectives that are aligned to the overall business’s objectives. The marketing objectives should have specific metrics, targets, and milestones defined. In practice, many marketing teams either don’t have clear goals, or the goals aren’t well communicated through the organization. In some cases, the goals are well defined, but there is no connection between the goals and the actual plan. Without a direct connection between the goals and the plan, marketing goals start to feel like an aspirational suggestion.
2. Poorly defined or communicated marketing strategy
The lack of a clear marketing strategy is one of the most significant causes of inefficiency in a marketing plan. Your marketing strategy is the means by which to make decisions about the appropriateness of marketing investment. For example, if you have a targeted account marketing strategy, a broad awareness approach might not be the best idea. You might instead leverage some Account-Based Marketing (ABM) tools to target your messages to the companies that are on your list.
When we review a marketing plan and see a cornucopia of approaches, we often ask the marketing team to articulate their core marketing strategy. While the marketing leader can often describe their strategy clearly and specifically, the rest of the marketing team often struggles.
3. A plan that is not designed to achieve your goals
The lack of goal alignment in marketing plans was one of our key motivations to write this book. When Peter reviewed marketing plans with marketing managers on his teams, he would ask how their activities were related to achieving the marketing goals. The typical response was a stunned silence, or at best, a loose connection to the overall goals. We find this is an issue with most teams.
4. Ineffective execution
Here’s some good news: if there is one thing that marketers are consistently good at doing, it is executing their plans. There are certainly cases where execution is a problem, but generally, marketers are really good at working toward a plan. The bigger issue is whether the plan is the right one, and designed to achieve your objectives.
5. Failing to optimize the plan when change inevitably happens
Many marketers are good at optimizing tactics but few are good at optimizing the entire plan. If you look at digital marketing, you will find that most digital marketing managers are analytical and diligent when it comes to the optimization of their tactics.
Marketing teams struggle with optimization when you start to think about optimizing across silos. For example, you might be optimizing your digital plan but neglecting the fact that you are struggling with sales tools further down the funnel. Or you may have a plan that includes a bunch of expensive events and under invests in digital campaigns. This level of optimization is most difficult because it involves moving resources and budgets between teams.
6. Poor communication of results
It may seem counterintuitive given the vast amounts of data and visualization tools available to marketers, but they still struggle to communicate their results in a way that is meaningful to the business. One problem that we often see is cherry-picking metrics or campaigns that look good versus showing the results of the total investment in marketing. We like to think about the concept of Return on Marketing Plan (RoMP), a view that considers your total investment across your entire plan and compares it to the aggregate result.
Another issue with telling an ROI story is the difficulty that people have calculating the full cost of a campaign. Most financial systems do not track cost by campaign, instead showing cost by department and general ledger (GL) code.
The most glaring issue with communicating marketing results is the inability to relate your investments and results to a set of aligned goals. When you communicate the results of your marketing investments to the executive committee or board, you need to be able to describe the results in the context of the business.
For a complimentary copy of the book, visit the Plannuh website.